Are the financial statements for Afuri Ramen Dumpling audited?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
older's Equity | .3 | | Statements of Cash Flows | . 4 | | NOTES TO FINANCIAL STATEMENTS | -7 |
yshcpa,com
INDEPENDENT AUDITORS' REPORT
To the Stockholder Afuri Franchise, Inc.
We have audited the accompanying financial statements of Afuri Franchise, Inc., which comprise the balance sheets as of December 31, 2021 and 2020, and the related statements of operations and stockholder's equity and cash flows for the years then ended, and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Afuri Franchise, Inc. as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Bellingham, Washington April 8, 2022
WHATCOM DEFICE
360.734.8715 a 360.738.1176 2200 Rimland Drive, Suite 205 | Bellingham, WA 98226
SKAGIT DEFICE
4, 360.707.4290 № 360.707.4331 200 E. George Hopper Road | Burlington, WA 98233
CANADA
BC: 604.531.6638 AB: 587.293.9595
VSH, PLLC -
| CURRENT ASSETS Cash and cash equivalents | S | 926,082 | s | 467,067 |
|---|---|---|---|---|
| Accounts receivable | ъ. | 48,765 | 4 | 22,323 |
| Prepaid Expense | 4,484 | 9,720 | ||
| Total current assets | - | 979,331 | - | 499,110 |
| 7 3437 5477 5477 5477 5477 5477 5477 547 | 1.0 | 0.0,001 | - | 100,110 |
| PROPERTY AND EQUIPMENT | _ | 5,647 | _ | 7,153 |
| NONCURRENT ASSETS | ||||
| Due from parent | 318,321 | |||
| Intangible assets | 94,996 | 69,040 | ||
| Total noncurrent assets | 94,996 | _ | 387,361 | |
| TOTAL ASSETS | _$ | 1,079,974 | $ | 893,624 |
| LIABILITIES AND STOCKHOLD | ER'S EQU | ITY | ||
| CURRENT LIABILITIES | ||||
| Accounts payable | $ | 1,141 | $ | 16,031 |
| Credit cards payable | 547 | 2,175 | ||
| Due to franchisees, gift cards | 7,993 | 1,165 | ||
| Due to parent | 62,760 | |||
| Current portion of note payable, related party | - 1 | 20,000 | ||
| Deferred revenue, current portion | 82,663 | 55,323 | ||
| Total current liabilities | 155,104 | _ | 94,694 | |
| NONCURRENT LIABILITIES | ||||
| Note payable, related party, net of current portion | 60,000 | |||
| Deferred revenue, net of current portion | 921,394 | - | 750,173 | |
| Total noncurrent liabilities | 921,394 | = | 810,173 | |
| TOTAL LIABILITIES | 1,076,498 | _ | 904,867 | |
| STOCKHOLDER'S EQUITY (DEFICIT) | ||||
| Common stock, no par, | ||||
| 100 shares authorized, issued and outstanding | ||||
| Additional paid-in capital | 18,000 | 18,000 | ||
| Accumulated deficit | (14,524) | (29,243) | ||
| Total stockholder's equity (deficit) | 3 | 3,476 | _ | (11,243) |
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | $ | 1,079,974 | $ | 893,624 |
| REVENUE | _ | 2021 | - | |
|---|---|---|---|---|
| Royalties | $ | 268,809 | $ | 155,904 |
| Initial franchise fees | 33,266 | 47,564 | ||
| Marketing fees | 32,628 | 8,886 | ||
| Franchise Reimbursements | 294 | |||
| Total revenue | 1 | 334,997 | 212,354 | |
| OPERATING EXPENSES | ||||
| Management fees | 175,279 | 98,000 | ||
| Professional services | 31,543 | 38,880 | ||
| Travel | 36,471 | 20,848 | ||
| Advertising and marketing | 12,130 | 15,183 | ||
| Business taxes | 10,874 | 10,249 | ||
| Licenses | 11,744 | 10,026 | ||
| Office and other business expenses | 11,094 | 9,339 | ||
| Meals and entertainment | 8,094 | 8,520 | ||
| Gift card program | 6,207 | 6,702 | ||
| Franchise service costs | 7,660 | 6,209 | ||
| Bank charges | 2,231 | 1,898 | ||
| Depreciation expense | 1,506 | 376 | ||
| Dues and subscriptions | 5,501 | |||
| Total operating expenses | 320,334 | 226,230 | ||
| INCOME (LOSS) FROM OPERATIONS | - | 14,663 | _ | (13,876) |
| OTHER INCOME (EXPENSE) | ||||
| Miscellaneous income | 2,160 | 125 | ||
| Charitable contributions | (100) | (325) | ||
| Interest expense | (2,004) | |||
| Total other income and expense | 56 | = | (200) | |
Source: Item 21 — Financial Statements (FDD pages 49–50)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the financial statements are indeed audited by independent auditors. The FDD includes reports from independent auditors for the financial statements as of December 31, 2020, December 31, 2021, December 31, 2022 and December 31, 2023.
The presence of an independent auditor's report indicates that a qualified firm has examined Afuri Ramen Dumpling's financial statements and expressed an opinion on their fairness, reliability, and conformity with generally accepted accounting principles (GAAP). Specifically, the report covers balance sheets, statements of operations, stockholder's equity, and cash flows for the specified years.
For a prospective franchisee, audited financial statements provide a higher level of confidence in the financial information presented by Afuri Ramen Dumpling. This is because an independent audit involves a thorough review of the company's accounting practices, internal controls, and financial reporting. The auditor's opinion adds credibility to the financial statements and reduces the risk of material misstatements or omissions. This allows potential franchisees to make more informed decisions.